State of Transport Infrastructure in

Latin America and the Caribbean

XV Latin American Port CongressGuayaquil June 27-30, 2006

Brad JulianPort and Maritime Transport SpecialistTransport and Urban Development (TUDTR)

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Agenda

Brief World Bank OverviewLatin America and the Caribbean– Facts and FiguresPrimary Components to Freight Transport System

Fixed InfrastructureTrade Facilitation

Key Messages

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The

Wor

ld B

ank

Gro

upThe International Bank for Reconstruction and DevelopmentEstablished 1944 184 MembersCumulative lending: $407.4 billionFiscal 2005 lending: $13.6 billion for 118 new operations in 37 countries

The International Development AssociationEstablished 1960 165 MembersCumulative commitments: $161 billion (includes credits, grants, and guarantees)Fiscal 2005 commitments: $8.7 billion 160 new operations in 66 countries

The International Finance CorporationEstablished 1956 178 Members Committed portfolio: $24.6 billion (includes $5.3 billion in syndicated loans) Fiscal 2005 commitments: $5.4 billion for 236 projects in 67 countries

The Multilateral Investment Guarantee AgencyEstablished 1988 165 MembersCumulative guarantees issued: $14.7 billion (includes funds leveraged through the Cooperative Underwriting Program)Fiscal 2005 guarantees issued: $1.2 billion

The International Centre for Settlement of Investment DisputesEstablished 1966 142 MembersTotal cases registered: 184Fiscal 2004 cases registered: 25

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Total Transport Lending 2002 to 2005: US$3 billion / 25 projects per year

Ports/Waterways/

Shipping3%

Railways9%Roads and

Highways66%

Aviation5%

General Transportation

17%

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Agenda

Brief World Bank OverviewLatin America and the Caribbean – Facts and FiguresPrimary Components to Freight Transport System

Fixed InfrastructureTrade Facilitation

Key Messages

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Latin America and the Caribbean (LAC) Facts and Figures

7.0%35625.1Container Port Throughput (TEU, million)

0.566,3283,575GNI per capita (2004, current US$)

1.05470497Fixed & Mobile phone subscribers (per 1,000 people)

1.0379%82%% of urban population with access to improved sanitation facilities (2002)

4.8%41.32.0GDP (2004, current US$ trillion)

8.5%6,400546Population (2004, million)

Share/Index of World

WorldLAC

Sources: World Development Indicators Database

Drewry Shipping Consultants

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MRS train on the bridge that links GuaMRS train on the bridge that links Guaííba Island to Itaguaba Island to Itaguaíí(Rio de Janeiro) on the continent (www.mrs.com.br) (Rio de Janeiro) on the continent (www.mrs.com.br)

Rail Infrastructure Diversity

8Coconut Loading Station, Costa RicaCoconut Loading Station, Costa Rica

Rail Infrastructure Diversity

9Cartagena, ColombiaCartagena, Colombia

Port Infrastructure Diversity

10Port of Belize Ltd.Port of Belize Ltd.

Port Infrastructure Diversity

11Northern Access, Buenos AiresNorthern Access, Buenos Aires

Road Infrastructure Diversity

12Guatemala Guatemala –– Honduras Border CrossingHonduras Border Crossing

Road Infrastructure Diversity

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Agenda

Brief World Bank OverviewLatin America and the Caribbean – Facts and FiguresPrimary Components to Freight Transport System

Fixed InfrastructureTrade Facilitation

Key Messages

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Infrastructure Stocks Have Lost Ground

Infrastructure gap has widened with Asia

Quality has improved, but still lags behind competitors

Still a sharp divide between rural and urban coverage within countries

Source: World Bank; Infrastructure in Latin America & The Caribbean, Aug 2005

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Private Participation in Infrastructure (PPI)

Total investment in infrastructure fell from 3.7 percent of GDPin 1980-1985 to an average of 2.2 percent in 1996 -2001.

LAC did exceptionally well in attracting 50% of the US$ 786 billion worth of projects with PPI to the developing world between 1990 – 2003.

However, private flows were not enough to offset the reduced public sector investment.

Six countries absorbed 93% of LAC’s PPI.Legal and Institutional reform were not ready for PPIOften PPI transactions were flawed in design and led to

renegotiation

Source: World Bank; Infrastructure in Latin America & The Caribbean, Aug 2005

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Infrastructure Performance Impacts Perceived Competitiveness

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LatinAmerica

andCaribbean

India China EasternEurope

East AsianNICs

World Economic Forum:The Latin America

Competitiveness Review 2006

Performance varies greatly among countries –some compare to OECD countries while others to Africa

Contributes to high logistics costs and requires high inventory levels

Detracts from private sector participation

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Trade Facilitation

Source: World Bank (IFC); Doing Business in 2006

Fixed infrastructure in LAC countries accounts for only 7 out of 36 days to import goods – not including time at sea

Most effective reforms in reducing regulator and transport costs of trading

Electronic document filingUse of risk assessment policy

for inspectionsRegional with reform of

customs and transport rules

Inlandtransport

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Port and terminal handling

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Customs inspections

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Prearrival Document

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Days to complete importing stages in LAC

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Agenda

Brief World Bank OverviewLatin America and the Caribbean – Facts and FiguresPrimary Components to Freight Transport System

Fixed InfrastructureTrade Facilitation

Key Messages

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Key Messages for Bringing LAC to Higher Levels

More investment needed in infrastructure – currently spending 2% of GDP – but 4-6% p.a. needed to catch up with middle income countries

“Governments need to spend better”

Governments remain at the heart of infrastructure service delivery

Increasing private participation in infrastructure will requirebuilding on lessons of the past

Significant competitive gains can be made in improved trade facilitation

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Brad JulianPort and Maritime Transport Specialist

Transport and Urban Development (TUDTR)bjulian@worldbank.org